Let's not all freak out just yet. People will find ways around this, including the VPNs and TOR. If those are blocked, I'm sure a lot of bitcoin users will simply move if they have to and still value bitcoin. I'm not entirely sure why China is cracking down on bitcoin so hard- anyone?
Fortunately the price of Bitcoin hasn't taken a huge hit yet. Any negative news is bad and even though it's just one country, it is a large country.
I'm hoping that other countries don't try to do what China is doing. I don't really think they can be successful because Bitcoin is psedo-anonymous. There will still be people in China that will hold Bitcoins because they have value. China will probably reverse course after they realize that they can't really control Bitcoin.
They will just transfer their coins to paper wallets and mail them out of the country to get fiat if the worse case scenario happened.